Local Energy Rules

The Minnesota Lawmaker Tackling Energy Problems Head-On — (Bonus) Episode 252 of Local Energy Rules

2025-11-05 · 18:35 UTC ·Local Energy Rules ·12 min read

Brief

In this Local Energy Rules interview, Minnesota Representative Patti Acomb surveys recent legislative and regulatory activity aimed at managing rapid increases in energy demand — notably from data centers — while advancing clean energy and protecting consumers. The 2025 legislative package requires that data centers that receive state tax incentives comply with Minnesota’s 100% clean energy goals and directs the Public Utilities Commission (PUC) to design rate structures that allocate the costs of new generation and transmission to those customers (rather than spreading costs to residential or other commercial ratepayers). Acomb emphasized state initiatives to expand clean-heat policy (buildings account for roughly 40% of Minnesota’s GHGs), community geothermal planning grants (passed “two years ago”), the Natural Gas Innovation Act, the Eco Act promoting electrification/fuel switching, and a 'solar for schools' program as building blocks for local self-reliance.

Acomb also addresses regulatory friction around ownership changes and siting. She expressed concern about the PUC’s approval of Minnesota Power’s parent-company sale to BlackRock and a Canadian pension fund after an administrative law judge recommended denial on potential consumer-cost grounds, noting PUC oversight will be critical to future rate cases. On siting and environmental protections, the Legislature has already required DNR involvement in water permitting for data centers, but Acomb argues that the current environmental review process (often the AUAR) is insufficient for data centers’ water, air, noise and cumulative impacts and has led to legal challenges; she wants clearer, predictable requirements to avoid ad hoc local deals. The episode also highlights alternative approaches, such as a recent Rewiring America analysis suggesting data centers could finance household demand reductions (smart thermostats, rooftop solar, batteries) as a condition of connecting new load — a demand-side mitigation model that would pair procurement of new energy with investing in local electrification and efficiency. Overall, the discussion centers on cost-allocation (rate design), stronger environmental review and permitting, and integrating demand-side programs to reduce net system impacts while protecting residential ratepayers.

Why it matters

Minnesota Representative Patti Acomb outlines state-level actions and ongoing priorities on clean energy, data-center guardrails, and regulatory oversight:

Key details

  • [policy] 2025 Minnesota legislation conditions tax incentives for data centers on compliance with the state’s 100% clean energy goals and directs the PUC to set rate structures so data centers pay for required new generation and transmission.
  • [regulatory] The Minnesota Public Utilities Commission approved the sale of Minnesota Power’s parent company to BlackRock and a Canadian pension fund despite an administrative law judge recommending against the deal over consumer cost concerns.
  • [environment] The Legislature required Department of Natural Resources involvement in data-center water permitting; Representative Acomb is pushing for stronger, more comprehensive environmental review beyond the commonly used AUAR (air, noise, water, cumulative impacts).
  • [initiative] State programs Acomb cites include planning grants for community geothermal, the Natural Gas Innovation Act, the Eco Act (efficiency, fuel switching, electrification), and an existing 'solar for schools' program.
  • [finding] Acomb flagged the risk that large industrial rate deals (including data centers) can shift costs to residential customers and says PUC vigilance on rate cases will determine whether ratepayers are held harmless.
Source evidence

title: The Minnesota Lawmaker Tackling Energy Problems Head-On — (Bonus) Episode 252 of Local Energy Rules
author: Local Energy Rules
publication: Local Energy Rules
published: 2025-11-05T18:35:32
sourceurl: https://media.blubrry.com/localenergyrules/content.blubrry.com/localenergy_rules/2025-11-ler252-Acomb.mp3

word_count: 2747

The intent of that is to have the Public Utility Commission set up a rate structure that will ensure that those data centers will pay for all of those things on their dime. Hey, you've stumbled on some bonus content from my two day nine interview podcast recording marathon at the Gateway to Solar Conference in October 2025. Please consider donating to ILSR to keep conversations like this flowing. Now, here's my exchange with Minnesota Representative Patti Accom, exploring the pressures of federal policy and affordability, clean heat and community solar, and the importance of strong regulatory oversight. First of all, Patti, welcome. I thanks so much for taking the time. Well, John, thanks for the invitation. It's great to be here with you at this wonderful annual event, the Gateway to Solar Conference is always a great event. I wanted to dive right into it. Legislators have a huge amount of responsibility over how our energy system works. You essentially are setting the rules for the energy system, the monopoly structure of it in terms of one utility for one service territory. You have climate change to think about. You have affordability to think about what is top of mind for you right now as you think about the next legislative session or just kind of like the responsibilities that you have over that energy system as a legislator. Well, I think that's an incredibly important question, especially at this moment in time, where Minnesota has focused really hard on clean energy. And we have our clean energy goals and up until this last election, we had been able to look to the federal government as a partner in that work. And that has all changed with the new administration. And so we in Minnesota need to be looking at what we're doing around affordability, around climate change through a little different lens. And so I think for me that will be continued focus on clean energy because that is the cheapest form of new energy. And so that will help address the affordability issue as well as climate change. And I think I'm saddest about the lack of attention at the federal level to climate change because of how quickly we're seeing impacts all the time. And so because we have done a great job making goals around clean energy, we need to continue in all sectors. And one that I want to look at next is really around clean heat. So buildings provide 40% of greenhouse gas emissions here in Minnesota. So what can we be doing to address those emissions? And so electrification certainly and using clean energy to power that electrification. So that's that's going to be where I'm looking. One of the things that I found really interesting about sort of growing up professionally in Minnesota is that we have had this long history of encouraging communities to be more self-reliant with their energy. We had one of the first states to adopt net metering to allow people to get credits on their bill for producing energy from rooftop solar. We had this whole history of community-based energy development and the early 2010s. We've had community solar. Maybe clean heat is the next iteration. But what do you think is the next iteration of that of Minnesota trying to figure out how our communities can do more of that sort of self-service? Well, I think those are all incredibly important programs and programs that are sort of in their infancy. I mean, community solar gardens is a pretty established program doing quite well in our state. But net metering, we have pretty low amounts of rooftop solar. And so I think we need to be working to protect those programs and ensure wider adoption. So removing barriers for people or companies to not be using these things. So I'll be looking at ways we can do that. Protect those and bolster those programs that you mentioned. As well as maybe expanding to other forms of clean energy. And one that I think about quite a bit is geothermal. And two years ago, we passed planning grants for communities to look at and explore geothermal. And I think that that will give them the opportunity to do it in a way to get the information, find the return on investment, how much it's going to cost, and determine for themselves in their community whether it makes sense. But it can kind of take that unknown out of the picture and they can then make the choices with information. So I think geothermal and other forms of clean energy should also be looked at when communities are trying to be self-resilient and reliant and sustainable. One of the things I'm super excited to be doing is I just did the first episode of a podcast series that I'm going to do as sort of a follow along with cooperative energy futures as they're looking to develop a community geothermal project. Because I've been impressed with the way that the legislature's already been thinking about this. We have the Natural Gas Innovation Act that is requiring the gas utilities to look into this. We have the Eco Act, which focuses on other energy efficiency, fuel switching, electrification. You have the planning grants that you mentioned. So I'm hoping to learn something through that process that might help to give some feedback on what's working, where there are more things. I guess I'm curious if there are other things you're already thinking of of like, hey, this is a place where we need more policy action. Well, since you brought that up, I will say a program that we passed in Minnesota a couple of years, several years ago, at this point is solar for schools. And so looking at an opportunity for geothermal for schools, maybe, especially if there's a complex of schools that make networking possible and maybe even combining in with some housing nearby. So the whole network to geothermal in schools. So I'm interested in looking for ways we can adopt that kind of model for that as well. So lots of ideas. I did want to ask you about on Friday last week, the Minnesota Public Utilities Commission made a final decision on the purchase of Minnesota Powers parent company. I feel like there's parent company after parent company. I can name like five corporate names here. But anyway, along in the short of it is this investor on utility publicly traded company that had been providing electricity service in northern Minnesota is now going to be owned by a combination of BlackRock, private equity firm, and a Canadian pension fund. One of the sort of notable things about the decision was that the administrative law judge that was overseeing the decision had recommended against it because of concerns about potential higher cost for consumers. I guess you make the decision as a legislature to kind of delegate responsibility to the commission to make these decisions. They're a little closer to them. I don't want to make you try to second guess publicly unless you feel like you want to that decision. But I don't know if you do have any reflections on kind of how that impacts sort of the broader goals that you've worked out as a legislator around climate, around affordability, around any of these kinds of issues. Well, I do think this was a pretty important decision and one that a lot of people were looking at. I heard from a lot of different stakeholders about this issue and I will say I have some concerns about the potential impact for residential rate payers in particular. And we see already in northern Minnesota that the industrial rate payers have worked out energy rates with utility. So in essence, residential rate payers are subsidizing these industrial users. And I am concerned about the possibility of data centers entering this area in this whole situation. And what that's going to do because they are industrial users that are kind of amped up even more. And so are they going to be putting pressure on utilities to spread those costs around again, more so to the retail rate payers. So I have some concerns. I'm certainly going to be watching how it goes. But I am hopeful that the Public Utility Commission who will be having oversight over all of the decisions and the rate cases coming out of the utility. So that gives me comfort. But I just want to make sure that when we're doing this, there's enough light on it that we can be assured that the public interests are being held up. It definitely seems like you have nothing else. The commission is kind of assigned themselves some homework through this because they ultimate accountability in terms of whether or not this ends up being expensive for consumers is going to come down to whether or not the commission will hold the line on potential future rate increased requests from the utility that's now owned by BlackRock. Yeah, that's exactly right. And I just given the uncertainty, we don't know how data centers are going to play into all of this. But I have concerns when you have some of the largest for-profit companies coming in and the pressure that they will put on the utilities and on rate cases. And so I will be watching for sure. And it causes some concern. But I'm certainly glad there's oversight by the Public Utility Commission. So we'll see how it all plays out. But we're watching. You mentioned data centers. I'd love to ask you more about that. I know the legislature took some action last year to try to put at least some guardrails or boundaries up around data center development in Minnesota. There's a multiplicity of issues here. Of course, you have one is just a small city's worth of demand that it can be added in one particular place. But you have the fact that they're being developed by, in general, these very large corporations that are used to kind of cutting deals. You're sort of suggested too. Like Minnesota Power, for example, has a lot of big industrial customers. They tend to negotiate these bilateral deals for what their rates are. Data centers are looking for that as well. Could you just summarize a little bit about what you already with the legislature did last year and then kind of where you're thinking there are still maybe holes in our policy solutions in terms of making sure that consumers are held harmless? Yeah, John, this has been a big issue in Minnesota and all around the country. And so what we attempted to do in 2025 in Minnesota was to say that if our state is going to be giving some tax breaks to these data centers that we wanna make sure there are some protections in place. And the protections we address in the legislation that we passed are protecting the 100% clean energy goals. And so the data centers when they're bringing new generation they're gonna have to be complying with 100% clean energy goals that we wanted to protect ratepayers. So we wanna, as I was saying earlier, it's not fair for residential ratepayers to be paying or footing the bill for these large corporations that need new generation and new transmission. And so the intent of that is to have the Public Utility Commission set up a rate structure that will ensure that those data centers will pay for all of those things their dime and it will not be relied on the residential or other commercial ratepayers to pay those bills. So that was an important piece of it. And then also it's important that because data centers need so much water and have an impact on our environment that we had some environmental protections. So while we didn't get as far in 2025 as I would have liked to go around environmental protections we did put some restrictions or regulations in place to ensure that data centers are working with the Department of Natural Resources and not just with local cities trying to get water permits. And so we want the Department of Natural Resources involved to ensure wherever these data centers are being placed or cited that there is an adequate water supply for the existing situation as well as into the future. And so having that relationship with the department to have conversations about how and where water is going to be utilized is an important piece that I feel good about getting. There are some other environmental pieces that I think we weren't able to secure and I will be continuing to focus on. I think environmental review for data centers is incredibly important because not only do they impact water but it's also air and noise. And so I think that the totality of environmental review will be important and the existing condition for environmental review for data centers is not adequate. Currently they're using oftentimes the AUAR. So the current condition is not being adequate and in fact we are seeing some of those data centers that had used this type of environmental review being challenged in court. And so I think just for the good of data centers and having the expectations that they need to do business in a state that if they know coming in, here's what they need, that's gonna be a whole lot easier for them. And we as a state deserve to be protecting our resources for now and into the future. So I think some reasonable environmental review is something I will be continuing to work for. I'm curious if you saw, just the last question, if you saw the rewiring America report that was released in the last couple of weeks, it was really intriguing because what they suggested was, hey, we have the loss of federal incentives for things like, you know, onsite solar, for clean heat, air source heat pumps, geothermal and whatnot. And what they were arguing was data centers are coming in and they're bringing lots of additional energy demand. And we could meet that demand with demand response like smart thermostats with solar and with battery storage and other electrification of consumer on consumer property. So they were saying essentially, we should tell data centers, you can buy your increased energy demand by helping households reduce their energy demand by essentially providing like rebates or incentives. I thought that was really intriguing way of looking at like, how do you come into the system? I mean, I think obviously setting up the guard rails around you are really going to use clean power if you're going to add more to the system. I thought it was really intriguing the way they set up this opportunity of, oh, maybe data centers could actually help us reduce energy use in exchange for the energy they want to use. Well, I love that. And I haven't heard that podcast. So you just gave me some homework to go and take a listen. So I will go and do that. But I think all of what you're saying and describing makes great sense. And so I'm excited to go listen to that. Thanks for giving me the heads up. Absolutely. I'm like, I'm going to the questions to you. Patty, was there anything else that you were hoping to come chat about? No, I'm just really excited to be here. I am grateful to you and the expertise that you bring towards the whole issue of renewable energy. So I appreciate you for having me. And thanks for all the good work you do. Thanks so much, Patty. Appreciate it. Thanks for listening to one of my nine mini podcasts from the 2025 Gateway to Solar Conference with Minnesota Representative Patty A. Com. We'll have links on the show page to my prior conversations with Annie Levinson-Falk and Brian Edström about the Minnesota Power Takeover, as well as ILSR's resources on Community Solar. Even these mini versions of local energy pools are produced by myself, an Ingrid Berson, with editing provided by audio engineer, Drew Bershbach. And as always, we're talking about taking on concentrated power to transform the energy system. Until next time, keep your energy local. And thanks for listening.